J.M William Turner – The Shipwreck, 1805, London - Tate Britain

Shipwrecks and other disasters at sea were frequently painted during the Romance period.

Costa Concordia Salvage Operation

It is expected to be the biggest salvage operation ever attempted. As of September 2013 the salvage has cost over $800 million.

The Bulk Carrier Double Fortune

The Panama flagged bulk carrier Double Fortune was built in 2010. Gross tonnage and deadweight are 50617 t and 95790 t respectively.

Manoeuvring Container Operations

Containerisation and multimodal transport: the development of door-to-door transport.

Fire Onboard Vessel

Fire on board ship is one of the most dangerous risks for vessels and cargos. Electrical equipments, flammable liquid on board, engines and boilers often cause it.

Monday, 25 May 2015

Offshore wind farm construction: Court of appeal reverses 20 year service life warranty decision following the Robin Rigg Grouting Failures

May 25, 2015. 

MT Højgaard A/S v E.ON Climate and Renewables UK RobinRigg East Ltd and another [2015] EWCA Civ 407.

The Court of Appeal has held that MT Højgaard is notresponsible for the cost of remedial work to the groutedconnections of the foundations at the Robin Rigg offshorewind farm, overturning last year’s first instance decision inthe Technology and Construction Court (TCC). In reaching its decision, the Court of Appeal has made a number of observations that will be of interest to contractors and developers.

The background facts and the contract

In 2006 MT Højgaard (MTH, the contractor) agreed to design, fabricate and install 60 wind turbine foundations at the Robin Rigg offshore wind farm for E.ON Climate and Renewables (E.ON, the employer).

In carrying out the design of the foundations, and the grouted connections in particular, MTH’s designer, Rambøll, relied on the international standard DNV-OS-J101 (J101). But J101 contained a fundamental error that resulted in a significant overestimation of the axial load capacity for wind turbines with grouted connections. Rambøll was unaware of this error when it carried out the design.

In 2009 it was discovered that movement was taking place in the grouted connections, following which the error in J101 came to light. All of the foundations required remedial work, at an agreed cost of €26.25 million.

The contract stated at clause 8.1 that, amongst other things, MTH “shall ... complete the Works”:

  • “with due care and diligence”;
  • “in a professional manner in accordance with ... Good Industry Practice”;
  • “so that the Works, when completed, comply with the requirements of this Agreement”; and
  • “so that each item of Plant and the Works as a whole shall be free from defective workmanship and materials and fit for its purpose as determined in accordance with the Specification”.

The Technical Requirements within E.ON’s tender documents (which became part of the contract) were contradictory. This was a key issue in both the TCC and the Court of Appeal decisions. Those Technical Requirements stated that the foundation design would “ensure a lifetime of 20 years in every respect without planned replacement”, which appeared to constitute a warranty that the foundations would function for 20 years. However, all of the other provisions in the Technical Requirements were directed towards a design life of 20 years. Furthermore, J101 (which was also incorporated into the contract) was itself confusing in this respect, as it referred to both a service life and a design life of 20 years.

The TCC decision

The Judge, Mr Justice Edwards-Stuart, held that:

  • the Technical Requirements required MTH to provide foundations with a service life of 20 years, which was additional to, but not inconsistent with, MTH’s other less onerous obligations such as compliance with J101;
  • MTH was in breach of contract as the foundations did not have a service life of 20 years;
  • Rambøll was not negligent in its design of the grouted connections; and
  • MTH was not in breach of a number of other specific contract terms upon which E.ON relied.

As a result, the Judge held that MTH was responsible for the cost of the remedial work.

The Court of Appeal decision

The Court of Appeal overturned the TCC decision. In reaching its decision, it held that:

  • the Technical Requirements did at first sight contain a warranty that the foundations would function for 20 years;
  • however, there were many other references in the Technical Requirements that were directed towards a 20 year design life;
  • if a structure has a design life of 20 years, that does not mean that inevitably it will function for 20 years, although it probably will;
  • J101 itself is intended to lead to offshore structures with a design life of 20 years;
  • repeated use of the word “minimum” in the Technical Requirements did not convert the requirement for a design life into a requirement for a guaranteed operational life;
  • the fitness for purpose warranty was to be read in accordance with, and was qualified by, the Technical Requirements and J101; and
  • a reasonable person in the position of E.ON and MTH would know that the normal standard required in the construction of offshore wind farms was compliance with J101 and that such compliance was expected, but not absolutely guaranteed, to produce a life of 20 years.

In conclusion, therefore, the Court of Appeal held that there were only limited references in the Technical Requirements to a 20 year service life: those references were inconsistent with the remainder of the Technical Requirements and with J101, and were too slender a thread upon which to hang a finding that MTH gave a warranty of 20 years guaranteed operational life for the foundations.

However, there was a small sting in the tail for MTH. The Court of Appeal agreed with E.ON that: (i) MTH failed to justify, with test data, its decision to omit shear keys within the grouted connections, in breach of the Technical Requirements; and (ii) MTH failed to carry out experimental verification of the design of the grouted connections, in breach of J101. However, the Judge held that even if MTH had complied with those provisions, that would not have led to any change in design. E.ON was therefore only awarded nominal damages of £10 for the breach of the Technical Requirements, and the Court held that no loss flowed from MTH’s breach of J101.


A number of points emerge from the decision:

Although the previous finding concerning a 20 year service life warranty was reversed, in finding that there was a 20 year design life warranty the Court of Appeal still upheld the previous comments of the TCC that an express obligation to construct a work capable of carrying out a defined duty (e.g. a 20 year service life or fit for purpose) can, if the contract wording is sufficiently clear, override the obligation to comply with the plans and specifications. If this is the case as a matter of contractual interpretation, then the contractor will be liable for the failure of the work notwithstanding that it is carried out in accordance with the plans and specifications.

This case therefore still highlights our previous comments regarding the potential value to an employer of an absolute warranty by a contractor to achieve fitness for purpose or some other requirement, versus the considerable risk to which a contractor is exposed if it provides such a warranty. Absolute warranties are common in engineering and construction contracts, including those used in the offshore oil and gas and wind farm sectors. Many of the popular standard forms, such as the LOGIC standard contracts, include absolute fitness for purpose obligations. The risks to contractors of accepting these provisions has now been clarified and should not be

This judgment also reinforces the importance of clear contract drafting, the risk of contradictory language and terminology (in this case “design life”, “service life” and even “lifetime”), and the problems that can arise when various documents from different sources are incorporated into a contract at different levels within the order of precedence without ironing out inconsistencies. If E.ON had really wanted a binding 20 year service life warranty, it should have insisted on that provision featuring prominently within the conditions of contract, rather than being tucked away in the Technical Requirements.

Source: http://incelaw.com

Wednesday, 13 May 2015

The European Court of Justice (ECJ) has this morning released its judgment in the landmark case of USDAW and Wilson (C-80-/14) and connected cases

May 13, 2015.

The European Court of Justice (ECJ) has this morning released its judgment in the landmark case of USDAW and Wilson (C-80-/14) and connected cases.

The key points are:

  • The ECJ has held that, under EU law, an employer only needs to take into account the number of proposed dismissals at each individual establishment when determining whether the threshold number for collective redundancy consultation has been reached.
  • This means that employers can now feel confident that they can treat individual sites or premises as separate establishments for the purpose of determining whether there is a requirement to collectively consult and what period of collective consultation applies, rather than having to ‘pool’ across different sites and premises.
  • The ECJ held that section 188 of the UK’s Trade Union Labour Relations (Consolidation) Act 1992 was compatible with the EU Collective Redundancies Directive (98/59/EC, the Directive) on this issue.
  • The ECJ confirmed that ‘establishment’, in the context of collective redundancy consultation, means ‘the unit to which the workers made redundant are assigned to carry out their duties’ (in line with its finding in the Rockfon case [1996] IRLR 168).
  • It further confirmed that it is not essential in order for there to be an ‘establishment’ that the unit in question has a management which can independently effect the collective redundancies. What constitutes a ‘unit’ in any particular case will remain for the national court to decide.
  • The ECJ judgment accords with the opinion of the Advocate General in the case which was released on 5 February 2015. For our briefing on the Advocate General’s opinion please click here.
  • An additional question had been asked of the ECJ, namely whether the Directive could have vertical direct effect against the UK Secretary of State. The ECJ stated that it was not necessary to answer this question as this was only relevant if it had held that the UK had incorrectly implemented the Directive, which it had not.

The judgment marks the end of a long running saga for UK employers. It comes as a welcome relief for employers after an extended period of uncertainty as to when it is necessary to conduct collective redundancy consultation. An employer can now feel confident that, when calculating whether it needs to collectively consult with its workforce on proposed redundancies, it only needs to take account of the number of proposed dismissals in each separate establishment. When doing this, it will, as it has done in the past, need to determine what constitutes an ‘establishment’ within its undertaking. This will require careful consideration and, in many cases, legal advice.

Source: http://www.freshfields.com

Monday, 11 May 2015

Turkish ship shelled off Libya coast, officer killed, several crew injured

May 11, 2015.

A Turkish dry cargo ship has been attacked near the Libyan port city of Tobruk, the Foreign Ministry in Ankara says. A ship officer was killed and several crew members injured.

The incident took place Sunday night. The ship was first shelled from the shore as it was approaching the area, the Turkish ministry said Monday. It was then attacked twice from the air as it was trying to leave the area. 

The MV Tuna 1, sailing under the flag of Cook Islands, was carrying a cargo to the Libyan port from Spain and came under attack when it was in international waters, the ministry said. The man killed in the incident was the ship’s third officer. 

The ministry condemned the assault, but did not specify who was behind it.

"We condemn strongly this contemptible attack which targeted a civilian ship in international waters and curse those who carried it out," it said.

A Libyan military spokesman responded to condemnations from Ankara, saying the vessel came under attack after ignoring a warning not to approach the city of Derna, some 145 km west of Tobruk.

"A ship was shelled about 10 miles from Derna coast. We have warned before about approaching Derna port," Mohamed Hejazi, a spokesman for forces with Libya's internationally recognized government, told Reuters. He confirmed one member of the crew was killed, but said that only one other sustained injuries.

A military source also told Reuters the vessel caught on fire and was towed in Tobruk terminal.

"There has been some tension growing between the official government of Libya and Turkey,” Catherine Shakdam, of the Beirut Center for Middle East Studies, told RT.

“Ankara was accused of supporting Islamist militia groups in Libya. What we've seen today is a continuation of these tensions."

She added: "Turkey has a history with the Muslim Brotherhood and we have seen militants in Libya acting under the wing of the Muslim Brotherhood or claim to belong to the Muslim Brotherhood. It is fair to say that the Libyan government feels threatened, at least by Ankara's broad ideological support of such groups.”

Libya remains in turmoil after the fall of Muammar Gaddafi in the popular uprising of 2011 and NATO bombing campaign. At the moment, two separate governments both claiming to be legitimate exist. 

The country has been riven by factional fighting and impoverished by the economic decline that followed the hostilities. It has also become a hotbed of international terrorism, with Iraq and Syria-based group Islamic State sending its fighters to Libya.

Back in January, a Libyan warplane attacked a Greek-operated oil tanker anchored off the coast. The attack by forces loyal with the internationally-recognized government of Libya was motivated by factions fighting for control over Libya’s oil export. Two crewmembers of the ship were killed.

Source: http://rt.com

Thursday, 7 May 2015

Offshore oil and gas safety - a regulatory overhaul

May 7, 2015. 

Environment analysis: The Offshore Safety Directive, adopted by the EU in 2013, aims to prevent major accidents relating to offshore gas and oil operations.

Original news: Offshore Petroleum Licensing (Offshore Safety Directive) Regulations 2015, LNB News 23/03/2015 175. The European Commission’s Directive 2013/30/ EU on the safety of offshore oil and gas operations (Offshore Safety Directive) and its requirements relating to licensing and certain environmental matters relating to emergency response is implemented in the UK on 19 July 2015.

What are the main objectives of the Offshore Safety Directive and the implementing regulations?

The Offshore Safety Directive has its origins in the EU’s response to the Macondo disaster in 2010 in which a gas release and explosion occurred on an oil rig in the US Gulf of Mexico. Following a review, the EU Commission felt that the Macondo incident highlighted the EU offshore oil and gas industry’s lack of universal mandatory safety procedures. In particular, it suggested a fragmented regulatory structure and lack of any overarching, cohesive legislative framework.

The EU adopted the Offshore Safety Directive on 10 June 2013 with the stated aim ‘to reduce as far as possible the occurrence of major accidents relating to offshore oil and gas operations and to limit their consequences’.

How will the regulations be implemented?

The UK is required to implement the Offshore Safety Directive via its national legislative framework. In order to meet the requirements of the new Directive, three existing UK regulations are to be amended and three additional pieces of legislation are to be introduced, as follows:

Amended regulations
  • the Offshore Installations (Presentation of Fire and Explosion, and Emergency Response) Regulations 1995, SI 1995/743;
  • the Offshore Installations and Pipelines Works (Management and Administration) Regulations 1995, SI 1995/738; and
  • the Merchant Shipping (Oil Pollution Preparedness, Response and Co-operation Convention) Regulations 1998, SI 1998/1056.

Additional regulations
  • the Offshore Installations (Offshore Safety Directive) (Safety Case etc) Regulations 2015, SI 2015/398;
  • the Offshore Petroleum Activities (Offshore Safety Directive) (Environmental Functions) Regulations 2015; and
  • the Offshore Petroleum Licensing (Offshore Safety Directive) Regulations 2015, SI 2015/385 (Offshore Licensing Regulations).

The majority of the Offshore Safety Directive’s requirements will be transposed into national law by the Offshore Installations (Offshore Safety Directive) (Safety Case etc) Regulations 2015. As far as the UK is concerned, many of the requirements are met in already stringent regulation but operators and contractors will still see some significant changes and differing terminology.

The Offshore Licensing Regulations have been drawn up in order to bring in the specific licensing requirements of the Offshore Safety Directive. They establish the criteria which companies undertaking offshore activities (such as, for example, exploration work or petroleum extraction) will have to meet in order to obtain an offshore license and set out the duties imposed upon them.

The Offshore Licensing Regulations provide that the licensee cannot appoint an installation or well operator without giving written notice of the proposed operator’s appointment to the licensing authority. Furthermore, they place a duty on the licensee to ensure there are adequate provisions to cover any liabilities that may arise from the offshore operations. In particular, financial responsibility is placed on the licensee in respect of the prevention and remediation of environmental damage that may be caused. Finally, it is also noteworthy that the Offshore Licensing Regulations now provide that a breach of their provisions will constitute grounds for the termination of the operatorship or revocation of the license.

What do stakeholders make of these changes?

The EU Commission’s original proposal for an EU regulation with direct effect throughout the EU member states was greeted with considerable concern by UK stakeholders. There was a widely held view that the UK’s offshore regulation was in a large part already fit for purpose following the implementation of the Cullen Report in 1990, and a concern that an EU regulation might undermine it.

Generally, since the proposal was amended to take the form of a directive there has been greater support. It is recognised that there will be costs involved in stakeholder compliance but the industry is safety conscious and highly motivated when it comes to improving safety standards for those working offshore and reducing the risk of future offshore accidents.

Are the changes likely to succeed?

The EU Commission’s decision to introduce its desired reforms via a directive rather than a regulation seems a sensible one. The greater flexibility afforded to member states in implementing the requirements should greatly increase the chances of the Offshore Safety Directive’s success.

However, success may ultimately prove difficult to measure. In jurisdictions with sophisticated offshore regimes day-to-day success is likely to depend upon the ability of the Offshore Safety Directive to enhance existing systems without adding unnecessary complexity. In jurisdictions with emerging offshore fields, the Directive will need to promote new systems. The EU Commission has taken a pro-active stance so far and there seems every likelihood that it will continue to enforce progress in this area. A key area of difficulty seems likely to be the implementation of realistic financial responsibility requirements. These will need to strike the right balance between making proper provision for potential liabilities and avoiding stifling industry growth.

What do affected parties need to be doing between now and when the regulations come into force in July 2015?

In so far as the safety regime is concerned, a transitional period has been granted for existing installations, allowing parties involved with ongoing operations until 19 July 2018 to comply with the new regulations.

Otherwise, the regulations (including the Offshore Licensing Regulations) will apply from 19 July 2016. In the UK the offshore industry body, Oil and Gas UK, is providing significant guidance and assistance.

Affected parties will need to give thought to who will be the operator for the purposes of the regulations and ensure that the requirements of the regulations can be met. Licensees will need to be aware of the additional requirements and potential liabilities placed upon them and manage their risks accordingly.

Further assistance from the government is also expected, with guidance for the offshore industry on the changes introduced by the regulations due to be published by the Department of Energy & Climate Change and the Health and Safety Executive in April 2015.

Source: http://incelaw.com